Day 92: 'The main priority'
An introductory weekday newsletter from Schwartz Media. Counting the days since Australia had an energy policy.
Good morning and welcome to day 92.
Today in summary: Labor is finalising its energy policy; the latest Fairfax/Ipsos poll shows voters care about power prices being cheaper slightly more than they do carbon emissions; and AGL Energy is the first of the major retailers to offer some discounts after the big stick was waved.
— Sophie
Today’s policy spin level: 💨💨💨
Please don’t keep Australian Energy Daily to yourself. Forward this email to your colleagues and encourage them to sign up for free here.
Labor will announce its energy policy later this week, and Fairfax reports its shadow cabinet is finalising its plan to cut carbon emissions and the plan will include a framework similar to the now-defunct National Energy Guarantee.
Fairfax said it:‘understands the policy to be considered on Monday is modelled on the guarantee, but the party is also working towards a much broader set of measures as it seeks to compete with the government's pledge to bring down power prices and shore up supplies.’
Shadow energy minister Mark Butler's office declined to comment.
The latest Fairfax/Ipsos monthly poll shows 47% of voters think cutting power bills should be "the main priority" of energy policy, while 39% prioritise reducing carbon emissions and 13% chose lowering the risk of blackouts. More generally, the poll showed Labor remain ahead of the coalition at 52% to 48%, though that’s closer than the 55%-45% in last month’s poll.
AGL Energy will give discounts of up to 10% to customers who have been on a standing offer for more than a year, following pressure from the federal government for the big three retailers to cut prices by January 1. Prime Minister Scott Morrison said this shows the government’s approach is working:
“For the naysayers, those who like to mock the big stick, like the Labor Party does, it's getting results.”
Geopolitics
Australia will invest, via a partnership with the US, Japan and New Zealand, to provide electricity infrastructure in Papua New Guinea. Currently only about 13% of PNG’s population have reliable access to power, and this new investment aims to lift that to 70% by 2030. Australia will spend A$25m in the first year and NZ about NZ$20 million, while the US and Japan have not yet said how much they will invest. The total cost of connecting 70% of people by 2030 has been estimated at US$1.7 billion.
The Commentariat
The Morrison government is “champing at the bit” for Labor to release its energy policy “so it can go after Labor for supposedly wanting to driving up power prices” writes Phillip Coorey in the AFR.
“Voters today are concerned about both price and emissions. They want both looked after and Labor will claim to be able to do this. Until August 24, the government was promising to do the same. Scott Morrison is under pressure from moderates to at least pay lip service to climate change by boosting the emission reduction fund by $1 billion but, otherwise, he cannot move.”
Three more things
Investment interest in lithium may be tempering, but with more projects coming online to support the expected growth in electric vehicles, bankers are weighing in. Westpac global head of natural resources Patrick Cocquerel told the AFR mainstream banks want to get more involved with the sector but have been held back by the lack of a well-defined index price for the lightweight metal.
US energy utility Pacific Gas & Electricity could be allowed to charge its Californian customers higher rates for power to avoid it going bankrupt in the wake of the deadly California bushfires. Analysts have estimated PG&E’s liability exposure at US$15 billion a year for 2017 and 2018, however the company said its insurance policy would cover less than 10% of that amount.
Plans for a national environment commission to be included in Federal Labor’s draft environment policy appear to have been kyboshed by Shadow Environment Minister Tony Burke, according to The Guardian. Burke says some of the specific commitments were included in the draft policy platform in error.